A trial officer with the American Federation of State, County and Municipal Employees heard arguments last week on whether former Local 372 President Santos Crespo improperly spent more than $600,000 toward overpayments for himself, officers and staffers, and to pay other bills.

Shaun Francois, who was elected president of the local last August, brought the AFSCME charges against Mr. Crespo in March. The overwhelming balance of the unauthorized spending concerns salary increases, severance pay, leave time and other payments when Mr. Crespo’s allies left the local.

North vs. South

About a dozen current and former Local 372 employees attended the May 28 hearing in the Presidential Suite on the 55th floor of the Millenium Hilton Hotel in lower Manhattan. Before the hearing, the leaders of the local congregated on the north side of the lobby of the hotel and Mr. Crespo’s attorney and those charged gathered at the south end.

To argue that raises were never approved for Mr. Crespo and former local staffers, Local 372 attorney Arthur Z. Schwartz presented executive-board minutes; Mr. Crespo countered by citing the local’s constitution and a December 2013 letter from AFSCME President Lee Saunders that he said gave him the authority to make personnel decisions. Also at issue was a 2013 vote to approve $200,000 to hire two new staffers, some of which went to paying for the raises.

“He was trying to justify it and he wasn’t doing very well,” Mr. Schwartz said of the former president’s testimony.

Shortly before Mr. Crespo left the local, he fired members of his executive staff and offered them severance packages. Mr. Schwartz said the ex-local president signed $399,000 worth of checks shortly before he left.

Crespo’s Justification

Mr. Crespo said he’d heard Mr. Francois say during the election he would bring in a new team and he pointed to an e-mail from one of Mr. Francois’s prospective employees that purported to show a transition team already in place.

Mr. Crespo said an AFSCME audit presented to him didn’t point to any financial irregularities, and that the constitution of the local gave him the rights routinely afforded employees, such as severance packages. “When you lose an election, basically the members have terminated you,” he said. “The members are your employer. That’s the local.”

The complaint alleges that Mr. Crespo made an $18,000 payment for an American Express bill after he was no longer authorized to do so. But he said he had proof the card was shredded and mailed to the local, and that the account was closed when he left the local.

“Luckily for me I had taken pictures of it in case they were going to say I had not surrendered that stuff,” he said. “I mean, I didn’t think something like that would develop.”

‘Slanderous’ Charges

Mr. Crespo called the accusations “slanderous” and said the local was trying to get money from a surety bond by saying fraud occurred. If the charges are upheld, the international union would reimburse the local for the money.

Mr. Francois, who won a contentious election and a subsequent run-off last year, said he didn’t dislike Mr. Crespo but he had to uphold his fiduciary responsibility to the local.

Eight others besides Mr. Crespo were charged, but he said they shouldn’t have been involved. “It was my authority that generated what the payments were, and that was based upon the formula in the manual,” he said. “So why bring them in? And the reason why some of them are not here is they would have to take a day off from work. For what? They’re not responsible.”

The complaint alleged that some employees were overpaid, but a former business office staffer, Anthony Shorter, told the CHIEF-LEADER in March that the local actually owed them contractual increases and retroactive pay going back four years.

The hearing began shortly before 10:30 a.m. and continued past 6 p.m. and included testimony from Local 372’s executive vice president Donald Nesbit, Mr. Francois and its business manager. Attorneys have until June 9 to submit written closing statements, Mr. Schwartz said.

Francois: Met Our Burden

Mr. Francois said he felt confident about winning the case. “I felt we put on the table what was being done wrong and we submitted our evidence clearly,” he said. “We have to bring the burden of proof and we’ve done that.”

AFSCME Trial Officer Steve Preble, of Minnesota, conducted the hearing and has 30 days after receiving a transcript to issue a determination.

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